rude oil prices surged sharply at the end of March, driven by escalating geopolitical tensions and renewed supply concerns. On March 31, WTI crude for May delivery jumped 2.94% to $71.40 per barrel, while Brent crude for June rose 2.65% to $74.69. This rally broke through recent trading ranges and underscored mounting investor anxiety.
The catalyst behind this move was U.S. President Donald Trump’s aggressive rhetoric against major oil-exporting nations. In a recent interview, Trump threatened secondary sanctions of 25% to 50% on any country buying oil from Russia, if Moscow fails to facilitate a Ukraine ceasefire. He also warned of potential military action against Iran and similar sanctions if no nuclear agreement is reached.
These statements sparked fears of a tightening global supply. UBS oil analyst Giovanni Staunovo noted that while these sanctions have yet to be enacted, markets are already pricing in the risk, pushing crude higher.
Further escalating the situation, the U.S. revoked licenses of several international oil companies operating in Venezuela, including Spain’s Repsol, Italy’s Eni, and France’s Maurel & Prom. This could disrupt Venezuelan output and further constrain global supplies.
Despite the bullish momentum, some investors remain cautious. Trump's upcoming “reciprocal tariffs” plan, expected later this week, could dampen economic growth if implemented aggressively. A slowdown in global trade could weaken oil demand, offsetting some of the supply-driven price gains.
Meanwhile, OPEC+ is phasing out its voluntary production cuts, and uncertainties remain regarding compliance from member nations. This adds another layer of unpredictability to the supply outlook.
Technically, oil prices are testing resistance zones, with speculative capital increasingly betting on further geopolitical escalations. However, traders remain wary of headline risks, particularly the gap between Trump’s tough talk and actual policy implementation.
In summary, the oil market has shifted from a demand-supply narrative to a geopolitical one. Traders will now closely monitor developments related to U.S. sanctions on Iran and Russia, Venezuela’s oil flows, and OPEC+ production behavior. Volatility is likely to remain elevated in the days ahead.
